The Board of Directors of the African Development Bank (AfDB) on Wednesday approved a 225 million euros loan to finance Egypt’s Electricity and Green Growth Support Program (EGGSP).
The EGGSP reform program seeks to promote a sustainable, competitive and diversified electricity sector that ensures secure supply and supports climate change mitigation and green growth in the country.
The Bank in a statement said the funding, provided in a challenging global context, will help meet the Government of Egypt’s financing requirements in the light of the COVID-19 pandemic, and support a sound electricity infrastructure base, a key enabler for the private sector and for the country’s competitiveness.
According to the Minister of International Cooperation, H.E. Dr Rania Al Mashat, “Accelerated deployment of the EGGSP reform program is instrumental to meet energy needs, combat climate change and promote sustainable development in Egypt. This multi-partner program provides a model for effective coordination among development partners as we continue to collaborate with all development partners to promote for a green recovery.”
“The EGGSP aims to improve the security of energy supply by increasing the share of renewable energy and improving the financial sustainability of the electricity sector with a view to ensuring greater participation of the private sector in injecting more investments in renewable energy,” H.E. Dr. Mohamed Shaker, Minister of Electricity and Renewable Energy, noted.
Over the last few years, Egypt has implemented robust reforms aimed at correcting macroeconomic imbalances and improving the business environment and fostering inclusive growth. This progress, however, is threatened by the impact of COVID-19 on the different economic sectors, including the power sector, and on the vulnerable.
“Whilst the pandemic has put extreme pressure on the economy and the social situation, the economic reforms undertaken by the Government of Egypt and the Central Bank of Egypt over the past few years have helped create greater resilience and provide a buffer against shocks such as the COVID-19 pandemic,” said Yacine Fal, the Bank’s deputy Director General for the North Africa Region.
The financing provided under the EGGSP support will buttress measures being taken by the Government of Egypt to combat the pandemic and to protect the most vulnerable during these difficult times. It will also help stimulate new private investments in the electricity sector and increase the deployment of clean energy in line with Egypt’s targets for green growth.
The Bank’s Country Manager for Egypt, Malinne Blomberg, highlighted that the newly approved program is a continuation of the Bank’s partnership with the Government of Egypt on the country’s reform agenda, now shifting the focus to meet the imminent needs in light of COVID-19 as well as the recovery phase that will follow and that depends on an efficient and sustainable energy sector. In addition to the partnership with the national authorities, the Bank is collaborating with the French Development Agency (AFD) and Japan International Cooperation Agency (JICA) on the Program.